Surge In Electric Car Sales In The UK In 2021 But Wide Market Hit By Chip Shortage

Electric car sales increased dramatically last year in the United Kingdom, although the market as a whole did not rebound completely from the Covid-19 pandemic hit.

According to the Society of Motor Manufacturers and Traders, more electric cars were registered in 2021 than in the previous five years combined (SMMT).

However, the industry group stated that considerably more investment in charging infrastructure was required.

On the other hand, a severe shortage of computer chips made it difficult for dealers to obtain many new conventional models.

Overall, the automotive industry had another bad year in 2021. According to preliminary estimates from the SMMT, 1.65 million new cars were registered.

This was a little improvement over 2020 when the first Covid-related lockdowns and dealer closures caused sales to drop.

But it was still the second-worst figure recorded in nearly three decades, and 28% down on its pre-pandemic level.

At the beginning of the year, there was a further lockdown, while any hopes of a lasting recovery, later on, were dashed by a severe shortage of semiconductors – or computer chips.

These are critical components in modern cars, being used in areas such as engine management and emissions control, emergency braking, airbags, entertainment systems, and navigation.

A modern car can use between 1,500 and 3,000 semiconductors.

But outbreaks of Covid-19 in regions where the chips are made, particularly in southeast Asia, caused factory closures that restricted supplies.

The automotive industry was also up against the stiff competition with other industries for acquiring the chips that were available, particularly with the consumer electronics industry.

As a result, automakers were driven to dedicate limited resources to the most profitable models as well as those that helped them reach emissions limits, such as electric and plug-in hybrid vehicles.

Despite the market’s overall issues, electric car registrations increased by more than 75 per cent from 108,000 in 2020 to 191,000 last year.

They sold one out of every four cars in December, while Tesla’s electric Model 3 was the country’s second-best-selling car for the year.

However, there were considerable geographical disparities in electric vehicle adoption. About 20 per cent of all electric and plug-in hybrid cars registered were in London and the southeast, while 10 per cent were in Wales and northern England.

Nonetheless, the government will applaud the overall trend, as it wants to phase out new petrol and diesel automobiles by 2030 in order to satisfy climate change pledges.

The SMMT, on the other hand, has warned that lowering the amount of the plug-in car incentive could send conflicting signals to customers. The maximum value of the grant, which is intended to decrease the cost of an electric car, was reduced from £2,500 to £1,500 in December, and the number of eligible models was reduced as well.

“It’s a confusing message,” said Mike Hawes, chief executive of the SMMT.

“It’s a massive ambition to get the entire market to move to meet net zero by 2030/2035. We would argue you need to use every lever at your disposal.”

“Anything that brings into doubt that commitment doesn’t help a consumer who might be wavering.”

The trade group also expressed worry that, while electric vehicle sales are rapidly expanding, the number of on-street public charging sites is not keeping pace.

“There will be more people competing for a much more slowly increasing number of on street chargers,” explained Hawes.

“We want the user experience to be seamless, to be affordable, and to be easy. And we just foresee this being one of the barriers to the consumer take-up of these vehicles that we need across the country.”

(Adapted from  BBC.com)



Categories: Economy & Finance, Entrepreneurship, Regulations & Legal, Strategy, Sustainability

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: